Making the Case for Managed Services
While many larger organizations have cut technology spending over the past 18 months or so, mid-sized businesses have always had fewer resources to build and manage the critical solutions they need. In addition, many companies are hesitant to increase staff size or make capital investments in an uncertain economic environment. Now, organizations of all sizes are turning to another option: using managed services can both contain costs and deliver the technology to compete effectively with firms of all sizes.
With the right provider, a medium-sized business can enjoy the same service levels as a Fortune 500 company, without the costs of building and maintaining an in-house solution.
Affordability Issues
At a seminar earlier this summer, I spoke with the CIO of a medium-sized service firm. His data footprint was growing rapidly at all locations: at the data center, at a satellite office, and on employee laptops. He knew he needed a new data backup strategy for his organization, but wasn’t sure if they could afford to do anything in the current year. Then we discussed in greater detail his needs and the options available, examining his total cost of ownership.Beyond Development Costs
Investment decisions often focus on the development costs, a significant share of a homegrown solution. But to understand the full cost of a do-it-yourself approach, CIOs should also include the following expenses:
- Hardware and Software: Cash and credit are both tight these days, making it hard to cover the upfront capital expenditures needed for an in-house solution. Factor in depreciation, licenses, and other costs to understand the full impact.
- Additional Staffing: While pundits debate our economic future, few firms are prepared to embark on a new hiring spree. An in-house solution may require additional staffing and training, or deter existing staffers from focusing on other pressing strategic initiatives.
- Infrastructure: Network, design and capacity upgrades may be necessary to keep pace with data growth.
- Facilities: Floor space, maintenance, and (volatile) energy costs are often overlooked but can quickly deplete a budget.
In light of these sometimes unpredictable costs, the service firm CIO soon decided that a turnkey service was the right approach to implementing the backup he needed this year.
Save the Way to High Quality
By eliminating or reducing most or all of the in-house expenses, mid-sized businesses can afford a solution of the highest quality and reliability, without the risks on a do-it-yourself project. According to a recent IDC study on disaster recovery, companies that leverage an in-house model spend 32% more than those opting to outsource.Will managed services meet your particular need? Ask potential vendors to show how they’ve reduced customers’ TCO or can provide savings on specific budget line items. In addition, a cloud-based service can deliver the efficiency, availability, and scalability needed for a rapidly changing business environment. If you’d like to find out more, I’d be happy to answer your questions about these options.
When the economy takes a downward turn, company IT budgets are usually one of the first casualties. This is the case with the current recession, as evidenced by an October 2008 CIO Magazine survey in which 40 percent of 234 IT chiefs surveyed said they are cutting spending, essentially freezing new IT initiatives, if not scrapping them altogether.
However, technology is a critical element of business, and despite the current economic climate, the need for reliable IT remains the same—especially when it comes to IT Maintenance or fundamental business applications such as email or customer relationship management (CRM). As companies across all industries face tough decisions about where to put their limited funds, Managed Services, hosted or "software as a service" (SaaS) model makes a great deal of sense.
How do Calm Response define Managed Services?
Any Proactive Services that are Remotely Delivered and Prepaid For, on a Recurring Basis.
If you would like to know more about how managed services can benefit your company, please contact us at Calm Response.
This article written by Daniel Rabbitt, IBM GTS Worldwide Marketing Manager for Business Continuity and Resiliency Services and appeared on infoboom.com
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